By Ross Todd, The Recorder

SAN FRANCISCO — LinkedIn faces claims that it violates a federal consumer protection law by providing reference reports about potential employees to paid subscribers.

On Tuesday, plaintiffs lawyers filed a proposed class action in U.S. District Court for the Northern District of California on behalf of anyone in the U.S. who’s had a reference report run on them through LinkedIn’s “search for references” function in the past two years.

According to the suit, LinkedIn can mine the information provided by users of its professional networking website to find potential references for job applicants without the applicants’ knowledge. Searches yield a list of the names and current job titles for potential references, along with the common employer they share with the applicant and time worked together.

The complaint claims that these reference lists amount to a consumer report under the Fair Credit Reporting Act, and that LinkedIn fails to abide by safeguards required under the law.

“In essence, LinkedIn has created a marketplace in consumer employment information, where it sells employment information, that may or may not be accurate, and that it has obtained in part from unwitting members, and without complying with the FCRA,” write the plaintiffs lawyers at Greenwald Davidson in Boca Raton, Fla., and the Law Offices Todd M. Friedman in Beverly Hills. Plaintiffs are asking for statutory damages for willful violation of the FCRA, which run from $100 to $1,000 per violation.

Plaintiffs are also seeking to certify a subclass of LinkedIn members who’ve applied for a job via the website who had reference reports run on them by potential employers.

Greenwald Davidson’s James Davidson said in a phone interview Friday that he was unsure of how large the class and subclass might be, in part, because LinkedIn users are unaware of when someone has run a reference report.

Although the FCRA generally applies to the big three credit reporting agencies—Experian, TransUnion and Equifax—Davidson says the definition of consumer report and credit reporting agency under the law are broad. “Our view of the case and the facts are that the content of the report and the way that LinkedIn markets it clearly [violates the law],” he said.

A spokesman for LinkedIn declined to comment.

IMAGE: Jason Doiy

For more on this story go to: http://www.therecorder.com/id=1202673121942/LinkedIn-Sued-for-Furnishing-Reference-Reports-on-Users#ixzz3G2d7LhvI